Sanctions compliance and enforcement

March 2024  |  ROUNDTABLE | GLOBAL TRADE

Financier Worldwide Magazine

March 2024 Issue

Even the most experienced sanctions compliance and enforcement practitioners concede that recent developments in this space have been unique. Against a turbulent world background, complex and coordinated regulations implemented by the US, the European Union and like-minded jurisdictions on targets such as Russia and China have initiated a new normal in trade controls. This sanctions model has the potential to be utilised by regulators as a powerful, coercive geopolitical tool. As regulations expand and evolve, impacted companies will need to have strong controls in place to ensure compliance.

FW: In broad terms, what do you consider to be the key developments and trends to have arisen in sanctions compliance and enforcement over the past 12 months or so?

Rezendes: There have been several developments and trends in sanctions compliance and enforcement. We have seen a pervasive use of sanctions by authorities to impose sanctions on those determined to circumvent or evade US sanctions prohibitions or assist those targeted by US sanctions. There has been an increasing overlap and synergies between the Office of Foreign Assets Control (OFAC)-administered economic sanctions and Commerce Department-administered export controls. Also notable is increasingly robust analyses around whether activity with or involving US sanctions targets includes a US nexus of any kind, and appropriate interrogation of any such nexus.

Smith: Overall, 2023 was an exceptionally busy year in the US and elsewhere. OFAC added approximately 2500 new designations to its sanctioned party lists and assessed the largest civil penalty in its history. The UK’s Office of Financial Sanctions Implementation (OFSI) issued its first penalties as well. Alongside this trend of aggressive enforcement, OFAC, OFSI and other regulators throughout the world focused on issuing unprecedented advisories to guide industry on key issues and compliance best practices. Such guidance in 2023 was issued on a wide range of topics, and was increasingly issued on both an interagency and international basis. For example, in the US, in December 2023, five government departments jointly issued guidance on best practices for sanctions compliance regarding maritime transportation. An October 2023 advisory on compliance with the price caps on Russian crude oil and petroleum products was co-signed by the entire Price Cap Coalition, consisting of the G7 nations, Australia and the European Union. This guidance, coming alongside a growing range of technological solutions in the compliance space, means that there is ever more information available to companies facing international trade concerns. The imperative is for companies to make sense of the torrent of information and to design effective systems to leverage it.

Roberts: The most obvious development has been the inherently flawed attempt to limit Russian revenue from its oil exports through imposing a cap on the price that Russian oil can be traded at. The further emphasis on the minutiae of trading and the due diligence expected of the G7 partners has contrasted starkly with the latitude enjoyed by India and China. The results have been mixed at best, with press reports at odds with Western official assessments that Russian revenues were down by 20 percent in 2023 compared to 2022. What is clear is that Russia has been able to establish a large tanker fleet and is trading almost normally without the use of Western ships or finance. The fact that another round of sanctions has had to be issued – namely,  LMA sanctions clauses LMA3100a and LMA3200 – to try to reduce circumvention suggests that G7 governments have been struggling to contain this.

Deaconu: Even the most seasoned sanctions and export controls professionals concede that the past 12 to 18 months have been unique in the world of sanctions compliance and enforcement. Indeed, complex and coordinated regulations implemented by the US, the European Union (EU) and like-minded jurisdictions, as well as those introduced by Russia and China, have brought about a new normal, with some even suggesting that export controls have become a new sanctions model – potentially to be utilised by regulators as a powerful and coercive geopolitical tool. Additionally, regulators have shown that competitive economic interests can be managed if there is enough willpower to do so by the sectors and industries affected – be it legal services, technology-driven industries, infrastructure, or healthcare and pharmaceutical sectors. Essentially, regulators have demonstrated innovative capabilities in the use of sanctions and export controls tools, with these controls converging to an extent that they are now largely symbiotic.

Welling: The last 12 months have primarily been focused on sanctions and export and import restrictions adopted in view of Russia’s war on Ukraine. After the EU adopted many of the well-known restrictions, the end of 2023 saw the rise of measures to prevent circumvention of already adopted restrictions. The EU appears to have found inspiration on the other side of the Atlantic, and has started pushing responsibility for sanctions compliance on private operators, by requiring standard clauses to be introduced in contracts when selling goods in states adjacent to Russia.

FW: In your opinion, what are the most pressing sanctions-related issues facing companies engaged in international trade?

Smith: The most pressing sanctions-related issue is the increasing convergence between sanctions and export controls, which creates a highly complex and novel compliance environment for companies to navigate. For example, at the end of 2023 the Biden administration promulgated executive order (EO) 14114, which authorises OFAC to impose ‘secondary sanctions’ – including blocking sanctions and restrictions on the maintenance of correspondent or payable-through accounts in the US – on foreign financial institutions (FIs) for, among other things, conducting or facilitating significant transactions involving the sale, supply or transfer of certain ‘critical items’ to Russia. This provision creates an export controls-like regime, but through the use of sanctions enforced by OFAC rather than export controls, which are principally enforced by the Department of Commerce’s Bureau of Industry and Security (BIS). This has been a wake-up call to some companies, especially FIs, which have historically focused on sanctions and not export controls. This new reality has been made even more challenging by the differences between how OFAC is addressing export controls and how BIS has historically addressed them. For instance, EO 14114 lacks a ‘knowledge’ requirement and the list of ‘critical items’ for which facilitating trade could give rise to sanctions is not tied to US export control classifications. As regulators continue to expand beyond their traditional remits and toolkits, companies are faced with significant challenges in developing and maintaining controls that address regimes that can overlap but also have important differences.

Roberts: The increasing number of countries prepared to promulgate their own sanctions is concerning, because traders have to be aware of all developments to avoid being penalised or, in the worst-case scenario, being shut down. Compliance with a spiralling DNA-type helix of overlapping and unharmonised measures is a significant and rising cost to business in both staff and time. It limits commercial appetite and enterprise and runs the risk of splitting the world completely into dollar and non-dollar blocs. If that happens, the supply chain will have to be re-engineered, and the consequences will be exceptionally wide reaching with domestic social unrest predictable.

Deaconu: The trends of 2022 and 2023 were defined by the impact of the sweeping suite of sanctions and export controls restrictions related to Russia and Russian businesses and individuals. These have brought to light the siloed mentalities of compliance departments and the extent of their failure in understanding and implementing effective controls. Russian sanctions have also served to highlight the lack of attention given to such matters by the management and leadership of many companies. As a consequence of such managerial inadequacies, compliance with the letter of the law is now a ‘given’, with a fresh approach demanded of companies as to how sanctions should be implemented and enforced. Thus, those leaders that have embraced sanctions and export controls compliance as a matter of culture and competitive advantage, and less as a cost and risk management issue, are now much more able to manage the unprecedented sanctions-related developments that commenced in February 2022 and continue today.

Welling: Keeping up with just one set of restrictions can be an almost impossible task for companies involved in international trade. With sanctions, countersanctions and blocking regulations adopted at an increasingly rapid pace, there are many pitfalls to look out for, and it can become a question about choosing the lesser of two evils. To add to this, private operators enforce even stricter compliance as banks and other companies are afraid of being held liable for another entity’s non-compliance. Many companies find that they are contractually forced to operate under stricter private rules than those imposed by regulators, such as forcing them to abolish trade with countries where trade could legally take place.

Rezendes: As the US and global sanctions landscape becomes ever more complicated, with overlapping and, at times, competing, restrictions, prohibitions and obligations, the most pressing sanctions-related issues facing companies grow out of the increased need to evaluate activity holistically. It was once the case that the US was considered the most rigorous sanctions regime, and in fairness, it likely still is, but strengthening of other regimes by allies and otherwise necessitates a more comprehensive review and diligence exercise when contemplating activity that may involve sanctions targets.

FW: Have you observed any intensification of recent enforcement activity? How aggressively are regulators pursuing and punishing companies that breach sanctions?

Roberts: The US has reimposed its Venezuelan sanctions in reaction to the country preventing the opposition candidate standing but it is too early to assess enforcement in that case. In terms of the oil cap, the US has made a few belated designations of limited consequence. The EU and UK, less so. Various sanctions packages have been trumpeted but, without concerted meaningful enforcement, they are a deadweight. Sanctions cannot succeed unless there is overwhelming international support, and this has been lacking in many cases but most obviously with the oil cap. Regulators are trying to enforce through imposing stringent due diligence requirements on legitimate companies within their jurisdictions, which is ultimately a much more expensive and duplicative route to achieving enforcement.

Rezendes: While the number of overall public enforcement actions by OFAC did not materially increase in 2023, it is fair to say that enforcement activity has intensified. OFAC issued 17 public enforcement resolutions in 2023, up one from the 16 public resolutions in 2022, and down three from the 20 in 2021. The overall settlement amount across the 17 public resolutions in 2023 was just north of $1.5bn, and notably nearly 96 percent of that amount relates to just two of the 17 resolutions: British American Tobacco and Binance. The approach of fewer, more impactful, resolutions is consistent with the OFAC’s public statements around using enforcement as a messaging tool to clearly signal the types of activities OFAC deems particularly troubling from a national security and foreign policy perspective. In addition, in March 2023, the US Departments of Commerce, Treasury and Justice issued a tri-seal compliance note detailing their collective crackdown on third-party intermediaries used to evade Russia-related sanctions and export controls, and in July 2023, a further note was issued addressing the agencies’ collective expectations around the submission of voluntary self-disclosures of potential violations.

Welling: 2023 was, from a regulatory enforcement perspective, not busy, but this may change as regulators appear to have switched their focus from adopting restrictions, particularly in relation to Russia’s war on Ukraine, to enforcing them. The focus on circumvention will likely drive enforcement activities in the coming year.

Smith: 2023 was a record-setting year in terms of sanctions enforcement, with OFAC assessing over $1.5bn in civil penalties. This significant increase from the year prior can be largely attributed to four settlement agreements each individually totalling $30m or more in fines, including particularly substantial penalties against British American Tobacco for over $508m and against Binance for over $968m. These two actions also reflect ramped up enforcement of sanctions violations by the US Department of Justice (DOJ), which announced actions against the companies in parallel with OFAC. In March 2023, Lisa Monaco, deputy attorney general, reiterated the DOJ’s commitment to prosecuting sanctions and export control violations. With BIS also announcing its largest-ever standalone civil penalty against Seagate in 2023 for export control violations, enforcement has intensified across the board.

FW: What, in your opinion, are the key requirements of a robust sanctions compliance programme? To what extent are companies utilising technology to strengthen their processes and controls?

Welling: If a company does not allocate sufficient resources to ensure compliance, it will for sure be non-compliant. Next, a proper risk assessment is the key component for any company operating internationally and exposed to trade restrictions. Without a proper risk assessment, companies are likely to either not be compliant or over-compliant, with both situations falling foul of regulators’ expectations. Having done a risk assessment, a company can start building adequate internal controls to mitigate risks. The next step is to follow up on internal control compliance, assessed both directly by compliance officers and internal auditors. Technology can play a role for a company at risk of dealing with specially designated nationals and denied persons. Certain controls, such as screening of third parties, can certainly benefit both from automation and the use of technology. However, for a multinational company, technology alone will rarely mitigate all risks, as technology cannot effectively mitigate export and import and dual use risks that typically require an in-depth assessment.

Deaconu: Regulators in various countries have published comprehensive guidance outlining the key elements of an effective sanctions compliance programme. However, while all companies, depending on industry, size and footprint, may be able to tailor these elements to suit their individual needs, there is one element that is a critical but often misunderstood component of an effective programme: people and culture. In today’s world of export control and sanctions, an environment of often unseen complexity that can change with lightning speed, the element of people and trust make for a powerful combination. Ultimately, a sanctions compliance programme focused on people as professionals is what makes it successful. Strong compliance professionals are strong business professionals with the skill of being able to translate complex regulations and apply them to a transaction, ideally with the full support and understanding of management. Another means of support is technology. Companies with a technology ecosystem as part of their internal compliance control programme, one that is scalable, flexible and augmented with technology professionals who understand regulatory challenges, is a key compliance enabler. Thus, today more than ever, the question of whether a company can do a deal or transaction can only be answered when there is a broad skill set, with detailed knowledge of the business deal, organisational footprint and infrastructure.

Smith: Since OFAC released its ‘A Framework for OFAC Compliance Commitments’ in 2019, the five essential elements of a compliance programme – management commitment, risk assessment, internal controls, testing and auditing, and training – have remained unchanged. A risk-based approach is still at the core of these commitments and resulting regulatory expectations. What continues to evolve, however, is the expectation of how those elements will be implemented. Technology has become even more critical, and companies have more options than ever in terms of restricted party screening providers and broader due diligence offerings. Indeed, the increasing focus on human rights diligence and trade laws designed to prevent the import of goods produced with forced labour, such as the Uyghur Forced Labor Prevention Act, has seen a sharp proliferation of tools aimed at mapping supply chains. And, like the rest of the technology world, providers are rushing to figure out how to leverage artificial intelligence and machine learning to streamline and strengthen these tools even further. Regulators, like BIS and the US Department of Homeland Security’s Customs and Border Protection, are increasingly publicly partnering with private sector technology providers. Companies are now facing increasing pressure, and expectations, to do the same.

Rezendes: OFAC detailed the key requirements of a robust sanctions compliance programme in its 2019 issuance of ‘A Framework for OFAC Compliance Commitments’, which highlighted management commitment, risk assessment, internal controls, testing and auditing, and training as the foundational hallmarks and baseline expectations of such a programme. Furthermore, companies are indeed utilising new and emerging technologies to enhance their processes and controls, both because certain technologies are proving useful and because OFAC expectations on this front are increasing. For example, in September 2022, OFAC published ‘Sanctions Compliance Guidance for Instant Payment Systems’, in which it noted that it was aware of artificial intelligence tools and other innovative compliance solutions, such as those that leverage information sharing mechanisms across FIs, which may enhance sanctions screening functions and reduce false positives. OFAC went on to say that where appropriate, based on an institution’s assessment of risk, OFAC encourages the use of such tools and other emerging technologies and solutions to manage sanctions risks that could arise in the context of instant payments. The availability of more advanced technological tools is moving the needle on what OFAC will consider to be reasonable when assessing whether compliance systems and efforts were adequate.

Roberts: A sanctions compliance programme has to be comprehensive and regularly updated. It also has to be top-down in terms of evidence that the board is aware of the risks to their company and supportive of the controls in place to mitigate them. There has to be sufficient staff with appropriate training to run the multiple checks now required, and it cannot be outsourced due to strict liability. Most companies rely on automated databases of sanctioned companies and individuals. Some also require that managing agents keep adequate documentation regarding compliance and controls, such as specific reference to sanctions risk and controls on risk registers, specific policies and procedures on compliance and controls, training on compliance and controls, and appropriate consideration of the risk of sanctions to both domestic and international business. Insurance services cannot be provided to persons and entities listed under the Terrorism Order, which will include UK persons and entities. UK persons and entities also appear under other sanction regimes, thus requiring automated checks to screen client databases against sanctioned persons and entities, which is recommended to be carried out at inception stage and on an ongoing basis, including before the payment of claims and return premiums, to ensure new sanction targets have not been designated. Appropriate contractual safeguards should be used, and there should be collaboration between employees putting the business on the books and those responsible for due diligence. A regular training programme to alert all staff to red flags is also important.

FW: How important is it for companies to carry out sanctions-related due diligence in their global business dealings? Are more companies seeking suitable assurances from entities they engage with, to reduce their exposure?

Deaconu: Companies at every step in the supply chain are trying to grasp the realities and complexities of being ‘directly and indirectly’ involved in a transaction. Most have tried to find solutions in the contracting realm of representations and warranties, and certifications. Some companies have asked their customers to certify that they are not on the US or EU sanctions list and will never be on a sanctions list, in a desperate attempt to cut corners and avoid sanctions screening. However, while contract clauses and certifications from business partners is good practice in certain circumstances and should not be ignored, it is not sufficient to withstand the high bar of ‘had reason to know’ and ‘should have known’ that regulators apply when issues arise.

Smith: If there was any doubt left regarding how essential sanctions-related diligence is for companies, the eye-popping civil penalties issued by OFAC in 2023 sent a strong message. Given that OFAC can assess civil penalties on a strict liability basis, appropriate third party due diligence is imperative to not only prevent and detect sanctions violations in the first place, but also as a potential mitigating factor in the event of an enforcement action. Incorporating sanctions-related representations and warranties into agreements with customers and suppliers can aid in these efforts, signalling to counterparties the importance of maintaining their own sanctions compliance programme. The most robust versions of these clauses provide companies with audit rights to monitor compliance as needed, indemnification rights, and a clean way to exit agreements in the event of non-compliance. Ultimately, however, contractual undertakings will not fully shield companies from liability and should be treated as only one aspect of a holistic approach.

Rezendes: While assurances from counterparties on sanctions compliance is expected and can be valuable, given that US sanctions generally impose strict liability, such assurances would typically not operate to insulate a company from violations of US sanctions. As a result, the importance of sanctions-related due diligence cannot be overstated. It is incumbent on companies to carry out robust and adequate due diligence on their global business dealings, which can be strengthened, but not replaced, by counterparty assurances on compliance.

Roberts: Without sanctions-related due diligence, companies cannot trade at all. Assurances from trading entities, whether sought or not, are insufficient to avoid strict liability. Thus, every entity is forced to carry out its own checks for fear of contravention, multiplying the administration behind trade and making it significantly less efficient. There is an unfortunate misapprehension that because insurance is integral to trade and thus underpins the social fabric, it has extensive accompanying constabulary powers when it actually has none. If there is criminal intent, there are contractual policy defences, and insurers contend that the outcome of such intent will not be affected by the removal of cover even if that could be achieved. This is an area where you see collaboration between brokers and insurers to ensure that appropriate checks have been carried out before putting in place the contract and prior to paying any claim.

Welling: If multinational companies trading internationally want a proper defence, they must do some due diligence on their third parties. If no due diligence is done at all, companies will have no defence to rely upon if they trade with a specially designated national (SDN) or designated person (DP) in violation of an asset freeze. Pushing responsibility onto third parties is not likely to produce an adequate defence in front of a regulator. However, requiring a third party to also comply with applicable laws and regulations is part of a well-functioning compliance programme, and can furthermore give companies a right to terminate contracts in case a third party violates or appears to violate trade restrictions. In its 12th sanctions package on Russia, the EU introduced an obligation for companies to contractually prohibit the re-export of certain categories of sensitive goods to Russia, including goods related to aviation, jet fuel, firearms and goods on the common high priority list. This should not be understood as alleviating companies from complying with existing export prohibitions, rather it is an introduction of yet another requirement to comply with and stresses the point that companies cannot rely on trade partners to do or be compliant on their own behalf.

FW: In your opinion, do companies need to improve their ongoing compliance processes? To what extent should they proactively review and update internal controls in line with regulatory changes, new business strategies and shifting market conditions, for example?

Welling: A compliance programme needs constant reassessment to address risks arising both from changes in the regulatory landscape and from changes in the way a company does business. This does not mean that risk assessments and internal controls need changing daily, but if there are changes in the regulatory landscape or the way a company does business, then the risks that these changes represent must be assessed against the existing compliance programme to ensure it covers them. If the existing compliance programme does not mitigate the new risks, naturally the company must ensure that they are mitigated via the introduction of new internal controls.

Roberts: In our experience, companies do proactively review their internal controls. It is not the compliers that need to change their process but the countries that impose the sanctions. They have to be specific, measurable and regularly reviewed to check their efficacy – it is damaging to non-designated commerce when sanctions are left in place when the target has evaded them either in part or completely. Companies that are currently trading are probably sufficiently advanced not to need to improve their processes. What they crave is clarity and harmonisation, and that is in many cases missing or even deliberately omitted to encourage due diligence. Commentators suggest the effectiveness of sanctions is highly variable and declines markedly over time, usually because of strategic vagueness in aim and actions by the targeted nation. The difficulty is for companies to keep up with the changes in sanctions, legislation and licencing requirements at present across multiple jurisdictions.

Rezendes: Compliance processes should be living, breathing and dynamic, such that they can be tweaked or updated to reflect regulatory changes, which often are immediately effective, requiring near-immediate compliance. Further processes should be capable of change to capitalise on new and more advanced tools and resources, which will be expected by OFAC and other stakeholders.

Smith: The idea of continuously improving compliance programmes is a fundamental feature of the guidance from OFAC, the DOJ and other regulators in their descriptions of effective programmes. There are few, if any, other areas of law that change as frequently and as materially as sanctions and export controls. Compliance programmes must be designed to ensure that companies can account for those frequent updates in their internal controls. For example, as OFAC and other regulators issue compliance advisories, companies are expected to stay apprised of this guidance and incorporate learnings shared by regulators into their programmes. Keeping a programme fresh requires adequate resources and strong lines of communication between compliance personnel and business units. Furthermore, ongoing monitoring and periodic risk assessments – another key compliance programme element – help ensure compliance programmes are continuing to account for an organisation’s greatest risks as those risks evolve.

Deaconu: Companies should stop looking at their compliance framework as a one-time activity and view it as a living, breathing entity that needs to be taken care of on a daily basis. Multinational companies operating in multiple countries, for example, cannot have a ‘one size fits all’ approach to compliance processes where the programme is centred around the laws of one or a handful of countries. Compliance programmes and any improvement processes need to have two pillars: a compliance ecosystem and a people ecosystem. The compliance ecosystem is an internal compliance programme specifically tailored to a flexible formula, where external reality and internal reality equals the risk and control environment. At the same time, the people ecosystem is the way a company positions its export controls and sanctions professionals – ambassadors with compliance know-how who are part of a business that accepts compliance as normal practice, effortlessly simple and with low friction.

FW: Looking ahead, what are your predictions for the sanctions landscape in the coming months? Do you anticipate increased government enforcement, and greater risks for multinational companies?

Roberts: Given the turbulent world background, it would seem inevitable that more sanctions will be implemented but enforcement is a grey area that is beyond industry. In particular, the efforts required to avoid being investigated due to the inherent ‘guilt by association’ principle are a burden to business. Multinational companies will find their markets increasingly limited or tied up in red tape. The West runs the risk of being able to trade only with itself and needs to be sure that is an outcome it can live with. The most difficult dilemma for multinational traders is anti-blocking, where one country passes legislation whereby it is illegal to comply with the legislation of another. The greatest risk for trade is the possibility of China choosing to exercise its untested blocking legislation. We do not predict significant increased enforcement unless governments are prepared to put significant funds behind their regulators. Enforcing through industry results in significant duplication of effort and inefficiency. In our experience, industry is willing to assist, but without well-funded and resourced authorities that are able to take proper action against perpetrators, rather than through indirect enforcement, there is far too much expensive activity that does not produce an effective outcome.

Rezendes: As has been the trend for some time now, and certainly since February 2022, the sanctions landscape is likely to become even more complex and, as a result, likely more difficult to navigate. Many have considered that Russia is a ‘nearly’ comprehensively-sanctioned jurisdiction – it is not, at least not yet. Change on this front is certainly an area to watch in the coming days and months. The days of new comprehensively sanctioned countries may be a feature of the past, replaced in modern times by more surgical or ‘smart’ sanctions. While much is already restricted and prohibited with respect to Russia, comprehensive, country-wide sanctions targeting Russia, such as an Iran or Cuba-style US programme, would, in many ways, be the ultimate escalation and a game-changer.

Smith: After another high-water mark year, there are no signs of enforcement or designations slowing down. Indeed, as the US heads into a presidential election year, an aggressive posture is even more likely as both Congress and the executive push for more sanctions and related actions. Furthermore, we anticipate there will be a continued blurring of the lines between sanctions and other trade control regimes, forcing companies across a range of industries to take a broader view of international trade compliance. Long gone are the days when, for example, FIs could afford to be primarily concerned with traditional blocking sanctions. Not only do new sanctions often include requirements that are more akin to export controls, but also more traditional US export control laws are themselves increasingly important from a liability perspective – even for entities, such as FIs, that have historically not been principally focused on such risks. As these regulations expand and evolve, companies will need to have strong controls in place to keep up.

Deaconu: The world of international trade is likely to become convoluted and vague as regulators struggle to react to global challenges and paradigms shifts, such as national security, foreign policy, and economic and human security. Sanctions were essentially created as an economic weapon, an alternative to war, and as such, only to be used in extreme circumstances. That said, to a large extent, sanctions compliance enforcement has become the weapon of choice for politicians and regulators alike – a defining feature of the new normal and, increasingly, how countries will choose to respond to geopolitical challenges and perceived threats to their national security.

Welling: Sanctions have in recent years become the new black. Politicians and regulators are likely to continue to introduce more trade restrictions in an attempt to drive a foreign policy agenda and, in some instances, even a domestic policy agenda demonstrating internal force in front of voters via a hard line toward other countries, such as when Donald Trump reintroduced sanctions on Iran and declared his trade policies on China. However, as sanctions have evolved, companies not only face the risk of increased enforcement. They also face the scrutiny of the public eye, and in a still more polarised world, compliance with sanctions have in certain regards become a question about being on the right side of history – either a company is for a certain policy objective or against it. Thus, reputational risk is very real, as many companies realised following Russia’s war on Ukraine, where the legal continuation of a business in Russia or even a seemingly slow exit from Russia drove huge media and consumer criticism and, in some cases, led to boycotts of companies. Thus, expectations are that regulatory enforcement of sanctions will grow, banks and businesses will continue to ask for even stricter compliance of each other, and the public, non-governmental organisations and media will have no tolerance for non-compliance and, in some cases, even require companies to over-comply.

Maura Rezendes advises clients – financial institutions and corporates alike – on a wide range of matters implicating economic sanctions administered by the US Department of the Treasury’s Office of Foreign Assets Control, foreign investment in the US regulated by the Committee on Foreign Investment in the United States, export controls, anti-corruption and money laundering. Her practice is multidisciplinary and includes regulatory compliance advice and counselling, transactional support, investigations and enforcement. She can be contacted on +1 (202) 683 3864 or by email: maura.rezendes@allenovery.com.

Snorre Welling is the global trade sanctions director in the legal and compliance desk in Carlsberg’s central office in Denmark, heading up the global trade sanctions and anti-money laundering (AML) team. He works on all aspects of corporate compliance and investigations with respect to export controls, trade sanctions and AML rules. He has worked with trade sanctions since 2010, first in the Danish Ministry of Foreign Affairs and subsequently in the private sector. He can be contacted by email: snorre.welling@carlsberg.com.

Adam M. Smith is a partner in the Washington, DC office of Gibson, Dunn & Crutcher and serves as co-chair of the firm’s international trade practice group. He is an experienced international lawyer with a focus on international trade compliance and white-collar investigations, including with respect to federal and state economic sanctions enforcement, CFIUS, the Foreign Corrupt Practices Act, embargoes, and export and import controls. He can be contacted on +1 (202) 887 3547 or by email: asmith@gibsondunn.com.

Neil Roberts has worked in the London insurance market since 1985. He is head of marine and aviation for the Lloyd’s Market Association and looks after the market’s joint committees, comprising Lloyd’s and company representatives. Part of that role is to act as London market liaison with the wider maritime services community, at both commercial and government levels, on technical and maritime security issues. He is also the chair of the IUMI Policy Forum. He can be contacted by email: neil.roberts@lmalloyds.com.

Adela Deaconu is an export controls and sanctions compliance professional with experience leading global operations, projects and teams in the semiconductors, consumer and healthcare industries. She has a track record in guiding and managing cross-functional professional teams in setting a strategic direction, risk management, design and implementation of sanctions compliance programmes in a matrix organisation. She also maintains government relations for an effective export control and sanctions licence programme. She can be contacted on +31 6 156 39802 or by email: adela.deaconu@philips.com.

© Financier Worldwide

THE PANELLISTS

Maura Rezendes

Allen & Overy

Snorre Welling

Carlsberg Group

Adam M. Smith

Gibson, Dunn & Crutcher LLP

Neil Roberts

Lloyd’s Market Association

Adela Deaconu

Royal Philips